Hastings Technology Metals Limited · ASX:HAS

Hastings Technology Metals — Investor Presentation (July 2018)

31 slides from Hastings Technology Metals's investor presentation, July 2018

  1. Slide 1: Developing a High Grade Neodymium & Praseodymium Mine

    Developing a High Grade Neodymium & Praseodymium Mine HASTINGS Investor Presentation Technology Metals Limited July 2018

  2. Slide 2: Disclaimer

    All currency amounts are in A$ unless stated otherwise. Disclaimer This presentation has been prepared by Hastings Technology Metals Limited (“Company”). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Comp

  3. Slide 3: Some End Uses for Magnets' Rare Earth

    Some End Uses for Magnets’ Rare Earth

  4. Slide 4: Hastings Equity Statistics

    Hastings Equity Statistics Steady growth in market cap since May 2017 • Market Cap ~ A$ 180m • ~ 1200 Shareholders +55% in 2017 • Top 10 shareholders owns ~ 70% • A$59m raised since 2014 • Cash: A$25m as reported on 31st March 2018 • No Debt • Included in the ASX All Ordinaries Index 4

  5. Slide 5: Yangibana Development History

    Yangibana Development History PROJECT MILESTONES Nov 17 DFS completed Jul 18 May 16 PFS completed Nov 17 LLTE orders Mar 14 Exploration land holding May 17 Native Title Jun 18 increased at Yangibana Metallurgical Pilot agreement Submission of PER Plant completed signed document 2014 2015 2016 2017 2

  6. Slide 6: Yangibana – Western Australia

    Yangibana – Western Australia Established Mining Region, Flat Terrain, Open Pit • Yangibana area ~ 650 km2 • 21 years Mining Leases granted since March 2016 covering only 50 sqkm • JORC Resource – 21m tonnes from 50 sqkm • Native Title Agreement signed Nov 2017 for 650sqkm • Miscellaneous and Genera

  7. Slide 7: Favourable Terrain

    Favourable Terrain Mineralised out crops, shallow open pit mining Selective Mining – Bald Hill Selective Mining – Fraser’s

  8. Slide 8: JORC Resources and Reserves

    JORC Resources and Reserves High Neodymium and Praseodymium content Total Yangibana JORC Resources (rounded) • Total Measured, Indicated and Inferred Category Tonnes Nd2O3+Pr6O11 TREO Nd2O3 Pr6O11 % % ppm ppm Resources now at 21MT* Measured 3,900,000 0.42 1.19 3,372 851 Indicated 8,600,000 0.42 1.25

  9. Slide 9: Native Title Agreement signed

    Native Title Agreement signed Agreement reached with Thiin-Mah Warriyangka, Tharrkari and Jiwarli • Signed 9th November 2017 covering all 650 sqkm • < 1% royalty based on sales for the LoM • Applicable to all rare earth and niobium mined • Provision of jobs and training for the community 9

  10. Slide 10: Definitive Feasibility Study (DFS) – Yangibana

    Definitive Feasibility Study (DFS) – Yangibana Independent Study by Wave International and Snowden • JORC Resource of 21MT supports an initial 8 years mine life on 100% held ground • Maiden JORC Probable Ore Reserves of 5.15MT on 100% owned ground • Highest known Neodymium & Praseodymium (Nd-Pr) con

  11. Slide 11: Four off-take MOUs signed

    Four off-take MOUs signed 70% of Yangibana production under Offtake MOUs to German and Chinese customers Ø Thyssenkrupp Raw Materials Gmbh – 5,000 tonnes per annum of Yangibana MREC for 10 years; for the German and European automotive and other industries (28 Feb 2018) Ø Baotou Sky Rock Rare Earth

  12. Slide 12: Yangibana Advantage – Highest Nd-Pr ratio

    Yangibana Advantage – Highest Nd-Pr ratio Comparison of REO Distribution & Basket Value • Nd-Pr /TREO Between Hastings and Major Light RE Producers composition is China Outside of China validated by customers RE Oxide/TREO Unit Hastings Baotou Sichuan Mt Weld Mountain Pass in the MREC Lanthanum % 9.

  13. Slide 13: Spot Prices of Rare Earth Oxides (May 2018)

    Spot Prices of Rare Earth Oxides (May 2018) China F.o.B. Export prices 09-Mar-2018 (USD/kg) & YTD change Lanthanum oxide La2O3 $ 2.37 1% Cerium oxide CeO2 $ 2.30 0% Praseodymium oxide Pr6O11 $ 70.50 +11 % Neodymium oxide Nd2O3 $ 58 +22 % Dysprosium oxide Dy2O3 $ 190.50 +9 % Terbium oxide Tb4O7 $ 517

  14. Slide 14: Peer Comparison

    Peer Comparison REO Composition and Basket Price Peak Basket Hastings Lynas Alkane Greenland Molycorp Resources Prices Mountain Project Yangibana Mount Weld Ngualla Dubbo Kvanefjeld Pass US$/kg Current Stage Construction Production Development Development Development Ceased Op Lanthanum % 10.0% 25.2

  15. Slide 15: Market Comparison (non-China)

    Market Comparison (non-China) Key Statistics NdPr Enrichment (NdPr % of TREO) Basket Value (US$/kg of TREO) 45% 40 41.8% 1 30 30% 29.2 20 24.2% 15% 21.3% 18.6 18.2 17.5 18.2% 18.1% 10 15.5 -­‐ -­‐ HasAngs Lynas Peak Greenland Alkane HasAngs Alkane Greenland Lynas Peak Resources Minerals Minerals Res

  16. Slide 16: The Yangibana Process and Product

    The Yangibana Process and Product From Mining to Mixed Rare Earth Carbonate (MREC) Successful BeneficiaKon and Hydrometallurgy pilot plan test-­‐work proves simple and effecKve producKon process flow sheet. 1m t.p.a. mined 30 - 40k t.p.a. Beneficiated ~15,000 t.p.a. MREC Concentrate = ~8,500 t.p.a. REO

  17. Slide 17: Yangibana Flowsheet

    Yangibana Flowsheet Pilot test work at ALS and ANSTO confirms production process Flotation Pilot Plant Operation at ALS, Perth • Beneficiation – more than 20x upgrade with 85% Nd-Pr recovery at optimum conditions • Hydrometallurgy – 41% Nd-Pr content in the Final flotation concentrate from Yangibana

  18. Slide 18: Downstream Toll Treatment by Customers

    Downstream Toll Treatment by Customers Estimated Tolling cost USD 2.50/kg (based on 15,000 tons MREC) Mixed Rare Earths Carbonate（MREC） Global Separation Capacity 15% Dewatering of Precipitated Solids MREC Dissolving 85% Separation with Solvent Extraction Calcination of Precipitated Solids China Out

  19. Slide 19: Global Nd-Pr Oxide Supply Demand 2017 - 2025

    Global Nd-Pr Oxide Supply Demand 2017 - 2025 Possible shortage - crossover point in 2020 Imports to rise due to higher domesKc demand from “Made in China 2025” policy Exports fall as Japan sources more from Lynas and ROW Source: Adamas Intelligence 14th International Rare Earth Conference, Nov 2017

  20. Slide 20: Made in China 2025 Policy – Implications

    Made in China 2025 Policy – Implications Do they have enough NdPr to meet ROW demand? • EV technology and production – China wants to be world leader ü750K EVs in 2017 to ~8M by 2025 • Supply Constraints due to eliminating illegal production üExport Quotas and Taxes/Royalties (to fund environment

  21. Slide 21: Global Demand Growth for Permanent Magnets

    Global Demand Growth for Permanent Magnets CAGR 2017 – 2022 is ~ 9% Application 2016 2017 2022 CAGR% USDm USDm USDm 2017–2022 Consumer electronics 1,933.9 2,090.8 3,078.0 8.0 Global Market for Permanent Magnets - by Industry 2022 (USD m) Electric motors 1,888.9 2,074.6 3,287.3 9.6 Sonic equipment, m

  22. Slide 22: Early Works Programme

    Early Works Programme Commenced Q2 2018 Bulk earthworks 240 room Civil engineering Establised an Order Critical Path contracts scope Accomodation design being Owners Team Long lead time items developed and work village - finalised for: ie. Rotary Kiln, to start in April fabricaton •Access roads FEED

  23. Slide 23: Overall Mine Layout

    Overall Mine Layout Optimising logistics between deposits • Mining by conventional drill and blast • Pit optimisations were completed to determine the economic mining limits for each deposit • Waste dumps located to minimise haulage distances • Mining schedule based on value creation and waste reduc

  24. Slide 24: DFS Capital Cost A$335m

    DFS Capital Cost A$335m An improvement of 20% from PFS A $ Cost Centre A$ Million Cost Centre Million Process Plant $130.2 Non Process Infrastructure $105.1 Mining Crushing and Screening 3.6 Mine Infrastructure 3.9 Contingency 1% 13% Grinding 14.1 TSF 1,2 and 3 19.5 Flotation 27.0 Evaporation Pond 0

  25. Slide 25: DFS Operating Cost A$17.06/kg of TREO

    DFS Operating Cost A$17.06/kg (US$13.00/kg) of TREO An improvement of 30% from PFS • May 2018 MREC Basket Price USD29.20/kg vs DFS of USD 30.50/kg¹ • Post-DFS Opex Costs estimate increase to USD15.00/kg vs DFS Opex of USD13.00/kg¹ • Expect rise in Opex due to pick up in activity in resource sector •

  26. Slide 26: Development plan 2H2018 onwards

    Development plan 2H2018 onwards Further in-fill drilling, FEED, early infrastructure work and financing negotiations targeted to secure financial close in 1Q 2019 Timetable Funding Options Q2-­‐3 Q4 Q1 Q2 Q3 • Project Finance Funding: Key AcAviAes CY18 CY18 CY19 CY19 CY19 Completed and ü Debt 65% :

  27. Slide 27: Timetable to Production

    Timetable to Production Milestones to production by Q1/Q2 2020 CriKcal Path 27

  28. Slide 28: Board of Directors

    Board of Directors Experienced Directors and Management Team Guy Robertson Charles Lew Jean Claude Steinmetz Finance Director & Executive Chairman Non-Exec. Director / Company Secretary Commercial Director • Corporate Finance Director HG Asia • Previously Chief Operating • 30+ years CFO experience S

  29. Slide 29: Management Team

    Management Team In depth experience and specialised skills Andy Border Stefan Wolmarans Hannes Zandberg Robin Zhang General Manager Exploration Chief Operating Officer Project Director Process Engineering Manager • 40+ years experience as a • 20 years experience in planning & • 30 years experience in

  30. Slide 30: Summary

    Summary § Experienced management § MREC with 41% NdPr content § Market Cap A$200m team with rare earth production experience § Basket price (May 2018): § NPV A$466m USD29.20/kg § Definitive Feasibility Study § IRR 78% (DFS) completed Nov 2017 § Mine construction 1Q 2019 Production Q2 2020 §

  31. Slide 31: Thank you. Q&A

    Thank you. Q&A 31

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